The huge fiasco surrounding the mega project to build a gas regasification terminal at Vasilikos is also testing the Cyprus-China relations at the highest level of government.
\nAccording to information from Phileleftheros, President Christodoulides has invited the Chinese Ambassador to Cyprus to a meeting on Monday at the Presidential Palace, apparently to protest against the attitude of the Chinese state-owned company CPP regarding the execution of the contract signed with the state-owned ETYFA for the import of LNG to Cyprus.
\nThe Chinese state-owned company CPP appears reluctant and unable to complete the project of constructing the Vasilikos pier, which will be used to dock the Prometheus floating gas storage and regasification unit so that LNG carriers can call at the pier for unloading.
\nIn its statement on Friday night, CPP declared that the situation as it stands is unsustainable for it, sending a clear message to the Republic of Cyprus that it will not restart the Vasilikos project unless its additional financial demands are met, which are considered outrageous and unacceptable by the Republic of Cyprus and its legal and technical advisors.
\nCPP has filed before the Court of Arbitration in London a claim for additional compensation from the Republic of Cyprus amounting to EUR 200 million! It claims that ETYFA, the subsidiary of DEFA that manages the Vasilikos project, is not cooperating and has further upgraded its claims for the pier, adding claims for the addition of expensive and time-consuming cryogenic technology so that the pier can be used for BOTH the import and regasification of natural gas AND the export of Cypriot LNG.
\nThe Cypriot side (Ministry of Energy, DEFA, ETYFA) replies that the contract the two sides signed in 2019 provides for the installation of cryogenic technology for gas export purposes if and when such prospects are created. It further says that any late objections by CPP to the content of its contractual obligations are due either to bad faith, its inability to understand the terms of the contract in their full dimension, or financial inability to meet its obligations.
\nBehind the scenes, the government asks: \u201cIf ETYFA\u2019s requirements were so far removed from the terms of the contract, why did CPP not react two or three years ago, but only did so in 2024, five years after the two parties began working together?\u201d
\nBeing only one step away from the collapse of the cooperation with CPP and the new multi-year postponement of the introduction of natural gas for cheaper electricity generation and a drastic reduction in the cost of purchasing pollutants from consumers, the government has raised the alarm at the highest level. The LNG terminal project was funded by the EU to the amount of \u20ac101 million and the Commission is closely monitoring it every day.
\nMoreover, the finalization of the divorce with the Chinese state-owned company will postpone the highly significant project in Vasilikos indefinitely, with incalculable financial costs for the state. More than EUR 300 million have already been paid, without Cyprus having any gas and consumers will be condemned to pay EUR 200-300 million per year for the purchase of greenhouse gases.
\nIn addition, a big asset is the Prometheus floating gas regasification unit (FSRU), for the construction of which Cyprus (ETYFA) has already paid about \u20ac200 million, but it remains in Shanghai because Lloyd\u2019s Register does not give its permission for it to sail to Cyprus, which owns it, due to some berthing modifications that the Chinese have to do.
\nIf the terminal is frozen and the ship is left (as booty) in the hands of the Chinese state-owned company, it will be a hell of a situation for the Cypriot state, with the responsibility primarily on the Anastasiades administration, which trusted the Chinese company despite the written objections of the Auditor General and the absence of real competition in the tender that was announced in 2018, but also on the Chinese government, which has the first say in the management exercised by the state-owned CPP.Vasilikos gas terminal. gas regasification terminal, Cyprus-China relations, Vasilikos project<\/p>\n","protected":false},"excerpt":{"rendered":"
The Cyprus-China relations are being tested due to a dispute over a gas regasification terminal project in Vasilikos. The Chinese state-owned company CPP is reluctant to complete the project, demanding additional financial compensation of EUR 200 million. The Cypriot side argues that CPP’s objections to the contract terms are either in bad faith or due to financial inability. The collapse of cooperation with CPP would result in significant financial costs for Cyprus and delay the introduction of natural gas for cheaper electricity generation. The situation is further complicated by the fact that a floating gas regasification unit remains in Shanghai due to berthing modifications required by Lloyd’s Register. If the terminal project is frozen, Cyprus may face significant financial consequences, with responsibility shared between the Cypriot government and the Chinese state-owned company CPP.<\/p>\n","protected":false},"author":5,"featured_media":12410,"comment_status":"open","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[7834,4586,240,486,2944,1031,1240,4369,3740,426,6262,1625,2021,5660,3475,2511,932,4961,2950,3,10558,9758,7017,1227,553,358,10556,379,8285,4962,4548,10557,415,4790,2841,3595,870,148,450,6653,1346,4442,9759,7186,758,7215,7378,1214,1237,7957,4843,2405,8539,4753,463,7309,3522,3225,5515,124,6386,7967,3878,1827,812,1682,114,10479,10462,10559],"class_list":["post-12409","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-absence","tag-anastasiades","tag-auditor-general","tag-china","tag-chinese-ambassador","tag-christodoulides","tag-clear","tag-collapse","tag-compensation","tag-competition","tag-consequences","tag-construction","tag-consumers","tag-contractual-obligations","tag-cooperation","tag-costs","tag-court","tag-cpp","tag-cypriot-government","tag-cyprus","tag-cyprus-china-relations","tag-defa","tag-dispute","tag-divorce","tag-electricity","tag-energy","tag-etyfa","tag-eu","tag-expensive","tag-fsru","tag-gas","tag-gas-regasification-terminal","tag-government","tag-installation","tag-introduction","tag-lng","tag-lng-terminal","tag-local","tag-london","tag-management","tag-meeting","tag-message","tag-ministry-of-energy","tag-monitoring","tag-natural-gas","tag-objections","tag-parties","tag-phileleftheros","tag-pier","tag-postponement","tag-president","tag-president-christodoulides","tag-presidential-palace","tag-project","tag-protest","tag-purchase","tag-relations","tag-republic-of-cyprus","tag-responsibility","tag-ship","tag-situation","tag-state","tag-state-owned-company","tag-statement","tag-storage","tag-technology","tag-top-news","tag-vasilikos","tag-vasilikos-pier","tag-vasilikos-project"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n